Chipotle Charts a Sustainable Course for 2023 With ESG Goals and Food Tech Investments

Fast casual restaurant chain Chipotle has announced its 2023 Environmental, Social, and Governance (ESG) goals, which will be tied to an executive compensation bonus of up to 15 percent.

Chipotle’s new ESG goals include increasing the pounds of local produce purchased, improving diverse employee retention — Chipotle says it increased its diversity from 60 percent to nearly 64 percent last year — and increasing the number of restaurants with composting programs. The announcement also comes on the heels of notable investments into food tech.

ESG Goals

“Chipotle’s ESG goals are a direct reflection of our commitment to inspire real, sustainable change with a potential impact far beyond this Company,” said Laurie Schalow, Chief Corporate Affairs, Chipotle. “We hold our executive leadership team accountable to make business decisions that Cultivate a Better World, and we want to continue to transparently showcase the steps we’re taking to help meet these objectives.”

The restaurant chain, which has more than 3,000 U.S. locations, says it is committed to increasing the total pounds of produce purchased from local farmers year over year. It defines local produce as a 350-mile radius of one of its distribution centers.

For this year, Chipotle’s goal is to purchase at least 37.5 million pounds of local produce, up from 36.4 million pounds purchased in 2022. The organization also met its 2022 goal of purchasing more than 57 million pounds of organic, transitional and/or locally-grown ingredients, with 58.3 million pounds in total minus rice and beans, which were excluded due to external crop factors.

Chipotle is also leveraging its new venture fund, Cultivate Next, to make early-stage investments in companies that can help further its mission and meet its ESG goals. This includes increasing its local produce supply through its latest investment in Local Line, a leading local food sourcing platform for regional food systems, serving farms, producers, food hubs, and food buyers by helping them digitize their operations and sell products. That investment will also support Local Line’s U.S. expansion.

Chipotle will also be increasing its focus on composting with a goal of reducing waste to landfills by 5 percent by 2025 and increasing the number of restaurants participating in its compost program by 23 percent this year. The chain said it exceeded its 2022 goal of reducing Scope 1 and 2 greenhouse gas emissions by at least 5 percent, achieving a 13 percent reduction against 2019 emissions.

Food tech investments

Cultivate Next is also investing in Zero Acre Farms, a food company focused on healthy, sustainable oils and fats. Zero Acre Farms uses fermentation to make oils that are more environmentally friendly than conventional vegetable oils, namely palm and soy.

Chipotle invested as part of Zero Acre Farms’ Series A extension round in an undisclosed amount. A spokesperson for Zero Acre Farm told Green Queen that the investment is not necessarily an indicator that the chain will be using the company’s oil in stores anytime soon. “This news is only in regards to a financial investment in ZAF by Chipotle,” they said. “That said, Chipotle makes investments through its Cultivate Next fund in companies it thinks can help it achieve its mission to cultivate a better world.”

However, the move could signal the chain is warming up to food tech. Chipotle has eschewed plant-based meat products such as Beyond Meat and Impossible Foods in the past, opting instead for tofu in its Sofritas instead, and a limited-edition plant-based chorizo made “using all real, fresh ingredients grown on a farm, not in a lab.”

In 2019, Chipotle CEO Brian Niccol told Yahoo Finance that the company spoke with the brands and “unfortunately it wouldn’t fit in our ‘food with integrity’ principles because of the processing, as I understand it, that it takes to make a plant taste like a burger.

“If there’s a way for them to do this that would match our ‘food with integrity’ principles, I’m sure we would continue talking with them.”

Chipotle’s Cultivate Next did invest in fellow Colorado-based company Meati Foods — a clean-label vegan meat made from mycelium.

“We are excited to support new ways to bring vegetables to the center of the plate though plant-based alternative protein options that mirror Chipotle’s Food With Integrity standards,” Curt Garner, Chief Technology Officer at Chipotle, said in a statement at the time. “Meati is producing responsibly grown plant-based protein that tastes delicious.”

The chain has yet to make any announcements about adding Meati to its menus, though. But a trial could be on the horizon as the startup has just started its retail rollout, landing in 380 Sprouts Markets earlier this month.